Contracts, bonuses and parties

Questions about the extension of contracts and the award of bonuses of between R1.8-million and R3.5-million to top executives at PetroSA are central to wrangling over the future of the company’s leadership under a Jacob Zuma presidency.

Three executives pocketed bonuses of a year’s salary, while the contracts of two executives were extended and the contract of chief executive Sipho Mkhize was extended ‘in principle”.

PetroSA said last week that the board had approved the once-off bonuses and extension of Mkhize’s contract in November last year.

The executives travelled to Zuma’s home town, Nkandla, in March this year for a sponsorship function. Some staff members, who asked not to be named, told the Mail & Guardian they believed the intention was to curry favour with the president-in-waiting.

The executives, who included Mkhize and the vice-president of operations, Dan Marokane, attended a two-day ceremony marking the electrification of 3 000 local households, attended by Zuma and the entire KwaZulu-Natal cabinet.

PetroSA has sponsored an integrated energy centre in the town to the tune of R13-million. Former minister of minerals and energy Buyelwa Sonjica’s spokesperson, Sputnik Ratau, denied that any meetings took place between PetroSA executives and Zuma, as did PetroSA’s Thabo Mabaso.

The PetroSA sources described the bonuses and contract extension as ‘highly inappropriate in the current political climate”.

‘This is PetroSA’s own little SAA-Khaya Ngqula scandal,” said one. Lucrative bonuses awarded to the airline’s executives contributed to former SAA boss Ngqula losing his job.

PetroSA executives appointed during former president Thabo Mbeki’s term are understood to be nervous about their future. The shadow of former deputy president and minerals minister Phumzile Mlambo-Ngcuka and her supporters still hangs over the parastatal.

Mlambo-Ngcuka, who has since nailed her colours to the Congress of the People (Cope) mast, first appointed Mkhize as the parastatal’s chair and later overruled its board by appointing him chief executive.

The M&G understands that Cope supporters are strongly represented in PetroSA’s upper echelons, with board member Ayanda Nkhulu openly supporting the party and another member, Nolitha Vukuza-Linda, being a Cope MP. A further board member, Raymond Zihlangu, has also expressed pro-Cope sentiments.

Some ANC members have voiced fears that Cope could use PetroSA to raise money, as in the Oilgate scandal during Mlambo-Ngcuka’s term. Cope members are said to be nervous about a possible purge.

Nkhulu, who has served two terms on the board and will leave at the end of the month, and Vukuza-Linda will shortly have to be replaced.

PetroSA chairperson Popo Molefe insisted last week that the parastatal was a non-aligned organisation where political orientation had no role. ‘The so-called Cope members on the board are fine individuals and it’s an honour for me to serve with them,” he said.

Molefe said the board decided to renew Mkhize’s contract ‘subject to assessment of performance, which is in process. The contract expires in September and in the light of the major strategic initiatives, including the refinery and infrastructure project planned for Coega, it was necessary for the board to give an indication of its intentions regarding the head of the team that drives these projects,” he said.

Mabaso, PetroSA’s spokesperson, said there was an incentive to encourage PetroSA’s senior management to apply for executive positions, which involved converting permanent employment status to five-year contracts. ‘This is a means of incentivising the move from permanency of employment to the uncertainty of executive management,” he said.

Only three executives had received bonuses: Godwin Sweto, vice-president of corporate strategy and planning; Everton September, vice-president of new ventures; and Marokane, who also chairs the company’s corporate social investment programme.

The contracts of the chief financial officer, Nkosemntu Nika, and the vice-president of trading, supply and logistics, Nompumelelo Siswana, were extended.
Staff at PetroSA are also unhappy about the perceived extravagant lifestyle of executives. Mabaso confirmed that the parastatal has corporate membership of the Simola Golf Estate in Knysna, which cost an initial R480 000 and then R12 000 a year.

‘The membership is flexible and any employee may invite stakeholders for a round of golf, subject to approval from the relevant executive,” he said.

The executives admit they have attended parties at Cape Town’s J&B Met, A1 Grand Prix and the Cape Town jazz festival. Mabaso defended this, saying that PetroSA’s expansion plans required the company and its executives to ‘engage in a range of networking initiatives with current and potential business partners, customers and investors”.